Strong year in 2017, but goods exports showed some signs of softening toward year end

Industrial production increased by 4.2 percent y-o-y in December

According to Statistics Finland, total industrial output, adjusted for working days, increased by 4.2 percent y-o-y in December 2017. In m-o-m terms, seasonally-adjusted output remained unchanged. In 2017, industrial output grew by 3.3 percent.

New manufacturing orders fell by 4.3 percent y-o-y in December

Industrial output increased in several of the main industries. Production levels grew most in the forest industry, by 7.2 percent y-o-y, while in the food industry, output expanded by 4.9 percent. Output decreased most in the electrical and electronics industry, by 4.4 percent y-o-y. After three months of increases, the value of new manufacturing orders fell by 4.3 percent y-o-y in December. In 2017, new manufacturing orders increased by 12.8 percent. According to the preliminary statistics for foreign trade in goods provided by Finnish Customs, the value of Finnish goods exports increased by 4 percent y-o-y in December. The value of goods imports was at the same level as the previous year in December. In 2017, the value of goods exports increased by 15 percent and the value of goods imports rose by 13 percent y-o-y.

Strong year in 2017, but goods exports showed some signs of softening toward year end

Finnish industry experienced a notable recovery in 2017. Following a strengthening of global demand, both industrial production and goods export volumes saw an upsurge in spring 2017. However, toward year end, the growth trend clearly softened, and this is more visible in goods export volumes. The goods export volume (deflated by export prices) grew by only 0.7 percent y-o-y in December. Some global business cycle indicators, such as global trade and industrial output volumes, showed some signs of maturing in recent months, and the Finnish goods export growth trend seems to be following the same path. Nevertheless, manufacturing confidence is still high in Finland. We expect robust growth to continue in Finnish industry this year; still, growth in industrial production and in goods exports is likely to slow from the previous year.